What is an executor?
An executor is the individual or organisation that you have appointed to oversee the finalisation of your estate. They are tasked with:
- Finding all the assets in your name at the date of your death;
- Paying out all liabilities or debts owing;
- Distributing your estate to the people who you nominate to receive your property i.e. the Beneficiaries
What is a beneficiary?
A beneficiary is a person who is named in the will to receive a benefit.
What is a trust?
A trust is an entity that is set up to protect assets. The trust is created by a trust instrument. The instrument is just a document that specifies the terms of the trust. There are many types of trusts.
What is a trustee?
The trustees are the people (or company) that is responsible for holding the legal ownership of the asset. They may or may not hold the beneficial ownership depending on how the trust is structured.
What are joint assets?
Joint assets are assets that are held jointly in the names of multiple parties. For example, a husband and wife may own property as “joint tenants”. If property is held as joint tenants then when one of the parties pass away the ownership of the asset automatically goes to the surviving parties. This process operates outside the will. The other way assets can be held are joint tenants. If a property is held by a husband and wife as joint tenants, then they own a share of the asset. In the example of a husband as wife they may own the property as joint tenants with a 50% or half share each. If this were the case and one of the parties were to pass away the other party would not automatically own the rest of the asset. The asset would then be handled by the will and probate would likely be required to transfer the asset into the name of the other person if that was what the will required.
What is executors commission?
Executor's commission is a sum of money (roughly between 2% to 4% of the estate) which can be claimed by the executors or executor for their "pains and troubles" dealing with the administration of an estate.
A recent supreme court case awarded a sole executor the equivalent of 4% of the estate and suggested " in the discretion of the Court, the amount sought by the applicant is not unduly generous reward for the work involved" which suggested that greater than 4% may be awarded in some instances. Other previous cases have the amount awarded as roughly 2% of the estate.
Executors commission is a total amount that can be claimed by a sole executor or jointly and shared between multiple executors.
To claim executor’s commission, the estate must seek the consent of a beneficiaries. It is often the case the beneficiaries involved agree to a reasonable percentage rather than going to the expense of court proceedings.
